July 2017

The thing about modern working is that no one is sure where the boundaries are anymore. There are generational differences within most workplaces meaning we grew up with different expectations of what ‘work’, and a workplace, actually looks like.

More and more businesses are offering agile working as an option. This means that employees can work from home, the coffee shop, or mum’s house, to complete their tasks. This shows a level of trust between the employer and employee along with the expectation that this will secure a more loyal and productive worker.

The question is, in whose interests does this work? From the employee’s perspective, there’s no longer a need to join the daily commute; technology allows for instant access to any files/information they may need; and, with clear work expectations laid out, they can achieve what they need to, when they need to. From the employer’s perspective, there is less need for day to day management and if deadlines are met, this creates an easy symbiotic way of life.

However, while agile working is becoming a more excepted alternative for some it asks more questions than it answers. Some people enjoy being in the office with clear expectations of coming to work, doing the job asked of them and then, hopefully, switching off from work once they leave. Granted, some may work long hours in the office, and may take work home, but, overall, work is at work and life is at home. With agile working, there is element of the unknown as people work differently and, by not being ‘supervised’, how do we know if one person is completing their task within hours while for others it takes days? As an employee, it can become unnerving having to justify, or thinking you need to justify, inputs and outputs.

There is another option. Consultancy. Again, this isn’t without risks. For many, the thought of leaving secure employment with the monthly salary, holiday and other benefits, and a business infrastructure, can cause shivers. For those contemplating this change there are other factors to consider such as, where you are in your lifecycle i.e. buying a house, starting a family, etc., but, more importantly, it depends where you are in your career. To succeed as a consultant, it’s useful to have a client following, though, not essential if you can go out and win new clients. If you’re not comfortable going out and making your name known, then choose the type of consultancy firm which provides business development support.

The clear difference between agile working and consultancy is that the line isn’t blurred. The work that you do as a consultant is for you. You are no longer accountable to a greater entity, only to yourself. This prospect can appear daunting but working for an organisation like Legal Studio, Setfords or Gunnercooke can give you access to market along with a business infrastructure to begin working with clients immediately but doing it on your terms. Every consultancy firm has different agreements with their consultants and it is all about what works best for you. The things to consider are: is there a joining fee? Are there targets? What is your percentage split? What support do you receive? The area of law you specialise in and what level you are at, will provide different answers to those questions but, again, it is about what works for you.

Ultimately, everyone needs to learn what type of worker they are? Are you someone who works best in an office with secure employment rights; or, do you work best out of the office with clear expectations; or, are you the type of person who wants to choose how and when you work without boundaries? Once you can answer that question it makes choosing the next step in your career that much easier.

Buying land with the benefit of planning permission can bring with it unexpected difficulties when the subsequent development is not carried out by the party who initially obtained the planning permission. Take a look at Lindsay Dixon’s advice to make sure the line is drawn correctly…

The case of Signature Realty Limited -v- Fortis Developments Limited highlighted the importance of obtaining an assignment of the copyright, or a licence to use, the Architect’s drawings that formed the basis of the planning permission to avoid infringing copyright in those drawings.

Signature Realty was a property developer which obtained planning permission for a block of flats based on drawings prepared by an Architect, but was then unable to secure finance to purchase the site and complete the project. The site was therefore sold to Fortis. Planning permission had been granted on the condition that the development was completed in accordance with the Architect’s drawings, which had been published on the local authority planning portal with a copyright notice. Signature Realty issued proceedings against Fortis for infringement of the copyright in the drawings.

The drawings had been used by Fortis for marketing the properties, tendering, producing AutoCAD versions and constructing the building. The Court held that there was sufficient intellectual skill in the drawings for copyright to exist and that Fortis had in fact infringed the copyright in the drawings.

The Court did not accept that Fortis had an implied licence from the Architect to use the drawings on the basis that they had paid a premium for the planning permission. Simply, Fortis had not engaged the Architect and it had not bought the land from the copyright owner.

The Court ordered an enquiry as to damages or an account of profits. The Court did not consider it appropriate to award additional damages under section 97(2) Copyright, Designs and Patents Act 1988 as there had not been a flagrant infringement and the benefit gained had not been as a direct result of the copyright infringement.

Ordinarily, in a situation such as this, the site owner will instruct the Architect to prepare design drawings before selling the site to a third party with an implied licence to use the drawings to complete the works required on the site to comply with the planning permission. In this case, however, the property developer who commissioned the drawings and obtained the planning permission was not the original land owner or the developer who built the building. Accordingly, they did not have any implied licence which they could transfer when they sold the land and therefore the copyright in the Architect’s drawings was infringed.2017 25 25162

Confidential information is that which is sensitive in nature and for which steps need to be taken in its protection. It often envelops material which cannot be protected under the registered or unregistered intellectual property rights of trade marks, designs, patents, copyrights, but still warrants a degree of protection.

However, merely deeming something confidential is not necessarily sufficient to render it so. There must be some degree of confidential quality and nature, and it must be treated as confidential. So not only in everyday actions, but also when being disclosed to a third party, where the method of disclosure must confer an obligation of confidence. Take a look at Ailsa Pemberton’s thoughts on keeping things confidential.

Trade Secrets

In some circles, it is considered that some information is more confidential than others; this information tends to be classed as “trade secrets”. However, not everyone buys into this classification and they simply believe that information is either confidential or not and cannot be graded. In practice we see high profile examples of trade secrets whose existence and the publicity surrounding them is as much about the branding as it is about secret technology. Coca-Cola’s “famous” secret ingredient has been the mainstay of its apparent uniqueness for over 120 years. KFC’s secret “blend of 11 herbs and spices” is a key element of its marketing message. The recipe for Irn Bru is a closely guarded secret.

Trade secrets are the most neglected form of intellectual property with no formal protection and no real definition. Despite appeals to provide for a more unified recognition and protection, at present trade secret disputes are dealt with via contract law or an action for breach of confidence. Contractual obligations can be imposed in a wide variety of circumstances: stand alone confidentiality agreements or non-disclosure agreements (NDAs); confidentiality clauses; terms of business; employment contracts; etc..

Protection

There are certain actions which can be taken to maintain a trade secret:

Confidentiality agreements/NDAs can be used where one or more parties will be disclosing confidential information for a defined purpose. That purpose will usually be a project that the parties are considering undertaking together. When negotiating with partners or potential partners, or when securing manufacturing or distribution agreements, there needs to be a formal agreement in place to oblige the third party to keep the information secret and only use it for the identified purpose. It is important to provide only what is required to support the purpose.

Use for defined purpose only. The recipient of confidential information agrees that it will not use the information for any purpose that is not set out in the confidentiality agreement.

Contracts of employment can also be used to preserve trade secrets. Specific confidentiality clauses can be added and/or restrictive covenants to prevent certain key employees with access to special information from taking up equivalent posts with competitors. All such clauses must be reasonable and proportionate.

Documenting the trade secret can provide important evidence that something is a trade secret. Some countries actually require a trade secret to be documented before it can be categorised as a trade secret and action taken.

Security provisions and policies are a further sensible precaution. Limit access to a need-to-know basis. Optionally, ensure that the numbers of people who know the secret in its entirety are limited. Control distribution. Use encryption and computer passwords.

Be seen to take swift enforcement action against breaches and former employees. This will give the clear signal highlighting the importance your organisation places in trade secret information and may deter others from doing the same.

Issues

In an employment context, some information cannot be counted as confidential (such as information about the business or industry in which employees were or are employed), if it is also available to the public in general or on request, as well as information representing common business practice. Other information is seen as confidential during the course of employment but not once the employee has left. This included knowledge which an employee “carries in his head”. The third category is genuine trade secrets which remain confidential after the termination of an employment contract. But the actual division can be blurred and each case rests on its own facts. A simple clause in a contract cannot necessarily be relied upon. Confidential information in the possession of an employee should best be recorded and categorised as confidential or a trade secret if it is deemed valuable and the duty of confidence the employee has in relation to that information should be clarified.

Where confidentiality agreements/NDAs are used, the discloser should be aware that the agreement cannot provide an absolute guarantee that the disclosed information will be protected. A confidentiality agreement has limitations, particularly where the recipient has little intention of complying with its obligations under the agreement. If a recipient uses or discloses confidential information in breach of the confidentiality agreement, it may be too late, or at the very least, prohibitively expensive, for the discloser to seek a meaningful remedy:

An injunction (to stop any unauthorised disclosure or use of the information) is the first choice of remedy if the discloser discovers the recipient’s intentions before it breaches the confidentiality agreement. After the breach, an injunction may be of little or no use. Once the information has entered the public domain, there is no legal remedy that will make it secret again.

Damages for breach of contract (or a claim for an account of profits where the recipient has made use of the information) may not be an adequate remedy, especially where the confidential information has potential future value rather than value today.

Proving that there has been a breach of a confidentiality agreement can often be difficult.

Even where the recipient is honest and acting in good faith, it will inevitably be influenced by the disclosed confidential information, whatever the terms of the confidentiality agreement.
Given these limitations, a discloser should, in addition to entering into the agreement, put practical measures in place to protect the information. For example, disclosing only what is absolutely necessary, providing hard copies of information only, or limiting the number of individuals who may receive the information.

Employment law is very much en-vogue. You can hardly open a paper or watch the news without hearing about another gig-economy employment case, a Government review into employment status, the Supreme Court considering the legality of tribunal fees or changes to national insurance for the self-employed.

Employment law is constantly changing. There is probably more focus on employment status at present than at any time in the recent past.

The definition of an employee will differ depending upon whom you ask. In health and safety case, an employee will be entitled to greater protection (and so the definition is very wide). The definition is probably narrower in employment law terms and more narrow still when determining how an individual is taxed.

When determining employment law rights – the definition of employee is of significant importance. Employees are entitled to far greater protection than the self-employed (or “workers”). Employees alone have the right to claim unfair dismissal, redundancy pay and maternity and other family leave and pay.

Employees also benefit from the protections afforded to “workers” (a hybrid EU concept wider than employee but not self-employer). Workers (and employees – as all employees are workers) have the right to the national minimum wage, holiday pay, whistleblowing and discrimination rights. The self-employed do not benefit from these protections.

By contrast those who are self-employed have tended to benefit from a more favourable tax and national insurance regime.

Recent employment tribunals have considered the status of individuals providing services to the public through Uber (drivers) and Deliveroo (couriers). Both emphatically concluded that those providing the services were workers (they were not determining employment status) rather than genuinely self-employed as the businesses had purported (and their detailed and clever contracts claimed).

This meant that Uber drivers and Deliveroo couriers were entitled to the minimum wage whilst working, paid holidays and had the right to bring discrimination claims.

The legal test to determine employment status is a multi- factorial test that considers various factors including control, personal service, the level of integration, the level of risk, mutuality of obligation and the level of control or autonomy. However, in reality the tribunals have a tendency to utilise the duck test (i.e. if it looks like and it quacks like….)

The Government is reviewing self-employment and is proposing to report in the Autumn (in time for increased national insurance contributions from the self-employed, probably in exchange for increased rights).

However, what we are seeing is that the old tests are not necessarily appropriate for today’s more flexible, variable workforce. The test of who was employed (the old “master and servant” tests) no longer necessarily fit today’s agile, autonomous workforce.2017 28 2456

The contract between a landlord and tenant will make provisions for the property to remain in good repair and condition. Take a look at the reasons why it is important to be aware of dilapidations.

A landlord will be keen to make sure that the property is managed properly and that, come the end of the lease term, the property is in the same condition as at the start of the lease. Otherwise, the landlord may struggle to find a subsequent tenant or may not be able to achieve enough rent. It is for this reason that the landlord will want to include within the lease a requirement for the tenant to keep the property in good repair and condition.

If the landlord is unable to let the property after the end of the term due to the tenant having failed to comply with its repairing obligations then the tenant may face a claim from the landlord for breach of contract.

When acquiring property, either under a new lease or by taking an assignment of an existing lease, it is essential that a tenant obtains proper advice. In order to reduce the risk of a potential claim at the end of the term it would be prudent to consider the following at the outset:

Potential costs – Ensure that financial provision is made. This may involve getting a survey commissioned by a surveyor in order that the potential costs are properly assessed.

A detailed schedule of condition – This should be appended to the lease and should set out the condition of the property at the start of the lease, thereby limiting the extent of work that can be claimed by the landlord to be required to put the property right at the end of the term.

Items already in disrepair – Despite the inclusion of a schedule of condition, certain items of disrepair which pre-exist the lease cannot be ignored for the duration of the term. In these circumstances the tenant would be better placed by taking a sum of money from the landlord or insisting that the landlord puts the property into good repair before the lease is signed.

If these issues are identified and dealt with there is one less reason for cracks to form in the relationship between landlord and tenant.2017 29 2359

Things are not always what they seem. Sometimes, what appears to be an agreement is not in fact binding. On the other hand, a binding agreement can be made without the parties realising it. So, when do you have a binding contract?

A contract is formed when the parties have agreed on its essential terms. There are no particular formalities required to create a binding contract. It is possible to create a contract orally or by conduct, as well as in writing.

A formal agreement is not always required. The parties may agree terms with the intention of preparing a formal document at a later date and it is often assumed that there is no binding agreement until then. That may not be the case. The Court will look at the parties’ words and conduct to determine whether it was intended they would be bound immediately or only after preparation of a formal document. Marking correspondence as ‘subject to contract’ will give an indication that the parties do not intend to create a binding contract.

Sometimes parties will agree ‘heads of terms’ or ‘heads of agreement’ as a pre-cursor to a full written agreement. Generally, these documents are not intended to be binding but the Court may find that the parties did intend to be bound based on their words and conduct. Again, using the ‘subject to contract’ label will assist in demonstrating that the document is not intended to be legally binding until a formal agreement is prepared.
It is common for parties to agree terms ‘subject to contract’ and then begin performing their obligations before a formal contract is in place. It can then be unclear whether the parties are acting on terms set out in pre-contract documentation; whether a contract has been concluded on more limited terms; or whether there is a binding contract at all. The outcome will depend on the particular facts of the matter.

It may be that the parties have entered into a binding agreement, but that the terms are incomplete or it is too uncertain to be enforced. In those circumstances, the Court may find that there is no binding contract because the obligations are too uncertain and there is simply no way to determine what obligations the parties have.
In order to be enforceable, an agreement requires ‘consideration’ to be provided by both parties. This is usually some form or payment or value. Where the obligations of one party are not sufficient to amount to consideration, payment may need to be made. It may also be necessary to have an agreement in the form of a deed.

Top Tips

Remember a contract can be made by email, orally or by conduct

Ensure all obligations under the contract are clearly defined

If it is necessary to start work earlier, ensure all key matters are agreed first